U.S. equities staged a notable recovery in afternoon trading on Wednesday, January 21, 2026, as investor anxieties eased following President Donald Trump's remarks at the World Economic Forum in Davos, Switzerland. The major market indexes, which had suffered their steepest declines in months on Tuesday, clawed back some ground, signaling a cautious return of risk appetite. The rebound was largely attributed to President Trump's statement ruling out the use of force to acquire Greenland, a key point of geopolitical tension that had rattled markets.

Major Index Performance and Afternoon Trends

As of Wednesday afternoon, the Dow Jones Industrial Average (DJIA) was up approximately 0.6% to 0.7%, recovering from a significant 1.8% tumble on Tuesday. Similarly, the S&P 500 (SPX) advanced by 0.5% to 0.6% after a 2.1% decline in the previous session. The tech-heavy Nasdaq Composite (IXIC) also saw gains, rising between 0.2% and 0.5%, following a substantial 2.4% slide on Tuesday. Futures for all three indexes had pointed higher earlier in the day, foreshadowing the market's attempt to stabilize.

Tuesday's market downturn marked the worst single-day performance for all three major indexes in nearly three months, primarily driven by President Trump's fresh tariff threats against countries opposing the acquisition of Greenland. The S&P 500 and Nasdaq had entered Wednesday in negative territory for the year, underscoring the impact of the recent geopolitical jitters. The Cboe Volatility Index (VIX), often referred to as the market's "fear gauge," had surged 26.67% to 20.09 on Tuesday and continued to trade near that elevated level on Wednesday morning, reflecting lingering investor apprehension.

Sectoral Shifts and Key Stock Movers

Afternoon trading revealed a clear shift in sector performance. The Energy sector emerged as the standout performer, with the S&P 500 Energy Sector climbing 2.3% in recent trading. This strength was reflected in individual stocks like Halliburton (HAL), which rose 4.9% after reporting stronger-than-expected quarterly profits. Overall, nine out of the eleven S&P 500 sectors were trading in positive territory, indicating broad-based relief. However, defensive sectors such as Consumer Staples, down 0.5%, and Utilities, down 0.1%, lagged behind.

Among individual companies making headlines, chipmakers Intel (INTC) and Advanced Micro Devices (AMD) were notable early advancers in the S&P 500, with shares up approximately 9% and 5.5%, respectively. Intel's stock, in particular, was trading towards a four-year high, surging over 10% on Wednesday, fueled by optimism surrounding its CPU momentum and potential in its manufacturing business. United Airlines (UAL) also saw a gain of 2.9% after reporting better-than-expected profits for the end of 2025.

Conversely, Kraft Heinz (KHC) was among the biggest decliners, falling roughly 6% after a regulatory filing suggested that Berkshire Hathaway (BRK.B) might sell a significant portion of its shares. Netflix (NFLX) continued its downward trend, falling 4.8% on Wednesday, extending losses from Tuesday's 5.1% drop and a further 5.0% decline after Tuesday's close. This persistent pressure on Netflix shares was attributed to slowing subscriber growth and a lower-than-expected profit forecast. Other "Magnificent Seven" tech stocks like Nvidia (NVDA), Broadcom (AVGO), and Tesla (TSLA) had taken a hit on Tuesday, with Nvidia sinking 4.4%, Broadcom sliding 5.4%, and Tesla falling 4.2%, as investors trimmed exposure to these previously crowded winners. Progress Software Corp (PRGS) bucked the trend, jumping 15.3% after posting a better-than-expected first-quarter outlook and fourth-quarter profit. NuScale Power Corp (SMR) also gained 6.3% following President Trump's public support for nuclear energy. Reddit Inc (RDDT), however, was down 5.9%.

Upcoming Market Events and Economic Outlook

Looking ahead, investors are keenly awaiting several key economic data releases and corporate earnings reports. Thursday, January 22, 2026, will bring the final estimate for Q3 US GDP and the November US core Personal Consumption Expenditures (PCE) data, which are crucial for gauging inflationary pressures. These figures will be closely scrutinized ahead of the Federal Open Market Committee (FOMC) meeting scheduled for next week.

The earnings season is "fast gathering pace," with numerous major companies slated to release their quarterly results this week. Intel (INTC) is among the bellwethers, set to report its fourth-quarter earnings after the market closes on Thursday. Meanwhile, the Bank of Japan (BOJ) is scheduled to meet on Friday to set interest rates, which are widely expected to remain at 0.75%. On the geopolitical front, arguments are being heard at the Supreme Court today regarding President Trump's attempt to dismiss Federal Reserve Governor Lisa Cook, adding another layer of uncertainty.

In broader market news, gold prices continued their ascent, hitting new record highs on Wednesday, with gold futures reaching nearly $4,900 an ounce early in the day and trading up 1.4% to around $4,830. This surge in safe-haven demand comes amidst ongoing global uncertainties. Treasury yields, which had jumped on Tuesday, eased slightly on Wednesday, with the 10-year Treasury yield slipping to 4.27% after closing at 4.30% the previous day. Additionally, natural gas prices experienced a significant surge of 26% on Tuesday, driven by forecasts of bitter cold weather across parts of the United States.

Despite the day's rebound, underlying concerns persist. The European Union (EU) has reportedly halted its trade deal with the U.S. in response to the Greenland situation, and the European Parliament's trade committee has indefinitely postponed a ratification vote on a US trade deal, signaling continued transatlantic trade tensions. These developments highlight the complex interplay of economic data, corporate performance, and geopolitical events that continue to shape the stock market's trajectory.